What is involved here is relief involving a reduction of 20 per cent of the tax liability of individuals solely resident in the State in respect of distributions or payments of interest made on stocks, shares or securities held by them which come within the provisions, originally, of an Act of 1932 designed to give preference to holdings in Irish companies. Since that time many things have happened. Of course, the level of taxation in manufacturing companies today is 10 per cent, very much lower than it was in the past. This relief is being discontinued at this point, the original purposes of which are not relevant in the way they were at the time it was introduced, at the time of the establishment of Irish industry.
It implements one of the recommendations of the Report of the Commission on Taxation, recommendation No. 31, which said that the 20 per cent relief for individual investors in certain industrial companies should be ended on the grounds that the relief had served the purpose for which it was introduced and was now unnecessary. The Commission added that today the demand for investment opportunities in publicly-quoted Irish companies exceeded what the market supplied. Indeed that is one of our problems, that there is an inadequate range of Irish companies in which one can currently invest and the funds available for investment exceed that demand. There is no problem today in attracting people to invest in Irish industry and publicly-quoted companies. There are just not enough publicly-quoted companies for people to invest in. Therefore the situation in 1932, when it was necessary to attract people to invest in Irish companies no longer arises. The Commission on Taxation recommend therefore that this provision be ended and we are carrying out their recommendation.